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Question 2: Ias 19 Employee Benefits: Page 1 of 2

(1) Alfalah Company had a defined benefit pension plan with plan assets of Rs. 685 million and plan liabilities of Rs. 715 million as of December 31, 2010. (2) The pension expense to recognize in profit or loss for 2010 is Rs. 12 million, consisting of a service cost component of Rs. 21 million and a net interest component of Rs. (9) million. (3) The net liability to show in the statement of financial position as of December 31, 2010 is Rs. 30 million, calculated as the plan liabilities of Rs. 715 million less the plan assets of Rs. 685 million.

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740 views2 pages

Question 2: Ias 19 Employee Benefits: Page 1 of 2

(1) Alfalah Company had a defined benefit pension plan with plan assets of Rs. 685 million and plan liabilities of Rs. 715 million as of December 31, 2010. (2) The pension expense to recognize in profit or loss for 2010 is Rs. 12 million, consisting of a service cost component of Rs. 21 million and a net interest component of Rs. (9) million. (3) The net liability to show in the statement of financial position as of December 31, 2010 is Rs. 30 million, calculated as the plan liabilities of Rs. 715 million less the plan assets of Rs. 685 million.

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paul saguda
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IAS 19 Question 2

QUESTION 2: IAS 19 EMPLOYEE BENEFITS

Following information is relevant to a defined benefit pension plan of Alfalah Company for the year
2010:
Plan Assets: Rs. (Million)
Balance at January 01, 2010 600
Expected return on plan assets 61
Contribution received 49
Benefits paid (40)
Actuarial gain (balancing figure) 15
685
Plan Liabilities:
Balance at January 01, 2010 640
Interest cost 52
Current service cost 21
Benefits paid (40)
Actuarial loss (balancing figure) 42
715

Required:
Calculate:
(i) Pension expense to be recognised in profit or loss for the year ended December 31, 2010.
(ii) Net liabilities to be shown in the Statement of Financial Position as at December 31, 2010.
(11)

ICMAP 501 – November 2011 – Q4b

Page 1 of 2 (kashifadeel.com)
IAS 19 Question 2

ANSWER TO QUESTION 2: IAS 19 EMPLOYEE BENEFITS


Part (i)
2010
Liability in SFP Rs m
Present value of the obligation at year end 715
Less: Fair value of the plan assets at year end (685)
Net liability to be shown in SFP 30

Part (ii)
2010
Charge to profit or loss Rs. m
Service cost component 21
Net interest component 52 – 61 (9)
Expense recognised in the profit or loss 12

Page 2 of 2 (kashifadeel.com)

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